Merchandise exports grow at a slower rate in May

Merchandise exports rose 5.4% annually in May, on the heels of April’s 11.4% upturn. There was double-digit growth in oil exports in May, and a 50% jump in mining output. In contrast, the key automotive sector saw only a mild expansion. Looking at key markets, the U.S. was the key driver of higher exports, offsetting weaker demand from the rest of the world. Meanwhile, merchandise imports expanded 1.4% in annual terms in May (April: +15.4% yoy). As a result, the merchandise trade balance improved from the previous month, recording a USD 2.0 billion surplus in May (April 2024: USD 3.7 billion deficit; May 2023: USD 0.1 billion deficit). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 3.4 billion deficit in May, compared to the USD 5.5 billion deficit in April.

Giving their take on the trade outlook, Itaú Unibanco analysts said: “Our trade deficit forecast of USD 14 billion for 2024 has an upward bias (narrower deficit), after [the May] figures. We expect the recent depreciation of the currency, generated by greater post-election policy uncertainty, to support manufacturing exports. Internal demand is likely to soften in the 2H24, as fiscal expenditure slows, which will likely curb consumption and capital non-energy imports.”

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